Commissions on outside payment methods are something most analysts agree are specifically allowed under the terms of the Epic v. Apple ruling, but 'allowed' and 'preferable' are quite different — one theory I've seen is that this filing is simply leverage, intended to get a stay on the ruling that is due to allow links to external payment methods starting on December 9.
Apple sponsored a study to compare commission rates charged by popular digital marketplaces (which includes the App Store, but also Uber, Airbnb, Etsy, Roku, Steam, and so on).
As evidence of the second point, yesterday saw some interesting whiplash on Hacker News: two of the day’s most popular comment threads were an [incorrect] report that Apple keeps their 30% cut even after a refund, and then the follow-up correction that no, they actually don’t do that anymore.
Yes, this is the mythical 'third-party in-app payment option'.
No, this is not a 'get-out-of-commission-free card'.
The details of this pilot program are not public, but that doesn't mean we're without precedent: Google already offers a similar program in South Korea, and the commission rate is only reduced by 4% for non-Google payment methods.
Via a middle-of-the-night press release, buried in the middle of this week's Apple Silicon MacBook noise, Apple just announced a new program to cut App Store commission rates from 30% to 15%…for ‘small businesses’.
In other words, commission rates are cut in half for all of the companies that hadn’t really been complaining all that loudly (perhaps because they lacked a tall enough soap box), but which everyone was assuming made up the silent majority.
It’s a great chess move. The impact on Apple’s App Store revenue will probably be statistically insignificant, and the big tech companies that are complaining loudly now look a whole lot more lonely.
This week, Apple released a couple of self-serve tools to help developers promote their apps.
They're…basic. But maybe a sign of more to come? After all, a robust array of tools integrated directly with the App Store could help justify that 30% commission rate…
At the risk of going overboard this week on the topic of App Store commissions, here’s a perfect illustration of the system’s quirks: COVID has forced business models to adapt, and formerly-offline activities like gym classes are now online gym classes.
…which suddenly makes payments for them subject to Apple’s 30%.
Remember a few years ago, when Facebook made algorithm changes and publishers swore to get serious about revenue diversification?
Turns out many of those publishers ‘diversified’ right into the open arms of Amazon’s affiliate program, which announced this week that commission rates would be cut in half. Ouch.
Patrick McGee on Twitter: "Overnight both @Apple and @EpicGames released hundreds of pages of new documents, containing lots of colour based on discovery and recent depositions. I stayed up reading so you don't have to."
The Apple v Epic lawsuit is ongoing (recap: Fortnite tried to enable in-app purchases without going through the App Store framework, and got kicked off the platform by Apple in response), and it's bringing to light some very interesting details.
This thread is FULL of fascinating scoops, but the clear theme is that Epic wants to demonstrate that the App Store's benefits aren't worth Apple's 30% commission.
Google is responding to Apple's App Store Small Business Program, which reduces the App Store commission to 15% for select developers (with some fairly strict limits and caveats). However, Google is upping the ante in the process: their new Play Store program applies to the first $1 million in earnings for all developers.
This handily avoids the 'revenue cliff' problem some iOS developers face, where they suddenly find themselves out of the Small Business program and subject to a flat 30% fee for slightly exceeding the cutoff.
Both policies are obviously good news, but Google's seems simpler and less likely to lead to unpleasant surprises.
The data in this report is already interesting just at face value. But hidden below the surface here is a fascinating thread to pull on: non-gaming app revenue declined far less (12.7% vs. just 4.8%) than gaming apps.
And that's despite this report only considering in-app purchase revenue (i.e., things subject to the Apple/Google commission).
Apple and Google already separate apps and games out into different sections of the store, and there have been suggestions floating around for a while that this should be made even more official. It would certainly give them more flexibility to differentiate in policy enforcement.